Deferred Revenue start date (with service contract)

Back to my favorite topic(s) - Amortizing a service contract. @MikeGross @kfierce

My question requires some explaining, but:
I want the amortization table to be, say, 12 periods and not 13 even if it’s not the first day of the month. And automatically when I pull in contracts to invoice.

Here’s my setup (in test). 12 periods, equal amounts.

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I made a service contract (not shown here) today (Aug 3) using this code.

In AR Invoice Entry, I use Actions > Get > Contract Billing and get this - 13 periods.

Now, I know that I can delete the schedule (also in Actions menu), then change the dates and recreate it, like so:

But is there a way to avoid doing this manually on every invoice?!

I tried changing the deferred revenue start date on the contract (crazy, right?), but that didn’t seem to do anything.

Ami I missing something?

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First - I am NOT an accountant :slight_smile: I just talk to them sometimes. I’m an IT guy.
Second - I do NOT pretend to understand the nuances of accounting rules, but they seem pretty simple.

So take this with that knowledge in hand.

It looks correct except the part where the AR Invoice Amortization date calculation is
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when you want it to be the Last Day of the Previous Period (based on that calculated date). And it looks like the 13th period gets created because that End Date is in the 13th period from the StartDate.

In doing some research I found the following tidbits:

Pg 1638 in the User Guide (10.2.300 version)

I’m wondering what your fiscal calendar looks like, because the End Date should have been a Period-Ending date I would assume. Do you have a separate fiscal calendar for generating Amortization periods/dates or is it the same calendar for the GL? Looks like the MAIN calendar is used for both GL and Amortization.

Pg 1641 in the User Guide (10.2.300 version)

“Actual Days – Use the actual days calculation method to recognize revenue based on the number of days in the period and not on a fixed percentage basis. The revenue distribution depends on the invoice date and the number of periods in the amortization schedule.
Review application help for the equation used to calculate the Actual Days method”
Looks like the Invoice Date is the real culprit…

Pg 1647 in the User Guide (10.2.300 version)

“12. If required, in the End Date field, enter a date to override the default end date for the amortization schedule.
If the invoice line is for a service contract and the Use Contract Expire Date check box is selected in Revenue Amortization Maintenance, the End Date field populates with the Expire Date field from the service contract.”

Perhaps this is the issue with Service Contracts. They have an expiration date, and maybe that is the ‘last day of the previous period’ date you need to use, instead of 12 periods out from the invoice date. I say this because the DR calculation would be based on the contract, not the invoice date as you could invoice after the contract begin date or before the contract begin date, and either of those dates would be incorrect for the DR period calculation, right?

I got it. It has nothing to do with any date.

It’s this checkbox in the setup. I had tried that, but I had to make a new contract from scratch for this to work. I guess it’s another thing the system secretly remembers.

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Here it is, even with a start date of 8/16/21.

Unrelated tangent: When you do set the start date of the contract in the future, you have to change the AR group’s invoice date:

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LOL!!! I was right :partying_face:
Glad you figured it out, and that I learned something about DR today. Thanks!

Yes, you sure were. It sure looks weird, with a blank end date now. But that’s the deal.

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Well that “deferred revenue start date” sure is useless, then!

It really doesn’t happen that often with accounting stuff. I mean I get really close usually…

This is really good to know. There are not many of us doing the Service Contracts and looking at DR.

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